Terms : Hide Images
| 462251087 | Economics | is the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided. | |
| 462251088 | Opportunity cost | The best alternative that we forgo, or give up, when we make a choice or a decision. | |
| 462251089 | Scarce | limited | |
| 462251090 | Marginalism | The process of analyzing the additional or incremental costs or benefits arising from a choice or decision | |
| 462251091 | Sunk Cost | Costs that cannot be avoided because they have already been incurred. | |
| 462251092 | efficient market | A market in which profit opportunities are eliminated almost instantaneously. | |
| 462251093 | Industrial Revolution | The period in England during the late eighteenth and early nineteenth centuries in which new manufacturing technologies and improved transportation gave rise to the modern factory system and a massive movement of the population from the countryside to the cities. | |
| 462251094 | Microeconomics | The branch of economics that examines the functioning of individual industries and the behavior of individual decision-making units—that is, firms and households | |
| 462251095 | Macroeconomics | The branch of economics that examines the economic behavior of aggregates—income, employment, output, and so on—on a national scale. | |
| 462251096 | Positive Economics | An approach to economics that seeks to understand behavior and the operation of systems without making judgments. It describes what exists and how it works. | |
| 462251097 | Normative Economics | An approach to economics that analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action. Also called policy economics. | |
| 462251098 | descriptive economics | The compilation of data that describe phenomena and facts. | |
| 462251099 | economic theory | A statement or set of related statements about cause and effect, action and reaction. | |
| 462251100 | model | A formal statement of a theory, usually a mathematical statement of a presumed relationship between two or more variables. | |
| 462251101 | variable | A measure that can change from time to time or from observation to observation. | |
| 462251102 | Ockham's razor | The principle that irrelevant detail should be cut away. | |
| 462251103 | ceteris paribus | or all else equal A device used to analyze the relationship between two variables while the values of other variables are held unchanged. | |
| 462251104 | Methods of expressing the quantitative relationship between two variables: | Graphing Equations | |
| 462251105 | post hoc, ergo propter hoc | Literally, "after this (in time), therefore because of this." A common error made in thinking about causation: If Event A happens before Event B, it is not necessarily true that A caused B. | |
| 462251106 | fallacy of composition | The erroneous belief that what is true for a part is necessarily true for the whole. | |
| 462251107 | Empirical Economics | The collection and use of data to test economic theories. | |
| 462251108 | Criteria for judging economic outcomes: | 1. Efficiency 2. Equity 3. Growth 4. Stability | |
| 462251109 | efficiency | In economics, allocative efficiency. An efficient economy is one that produces what people want at the least possible cost | |
| 462251110 | equity | Fairness | |
| 462251111 | economic growth | An increase in the total output of an economy. | |
| 462251112 | stability | A condition in which national output is growing steadily, with low inflation and full employment of resources | |
| 462392847 | aggregate behavior | The behavior of all households and firms together. | |
| 462392848 | sticky prices | Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded | |
| 462392849 | Three of the major concerns of macroeconomics are: | Output growth Unemployment Inflation and deflation | |
| 462392850 | Business Cycle | The cycle of short-term ups and downs in the economy. | |
| 462392851 | Aggregate Output | The total quantity of goods and services produced in an economy in a given period. | |
| 462392852 | Recession | A period during which aggregate output declines. Conventionally, a period in which aggregate output declines for two consecutive quarters. | |
| 462392853 | Depression | A prolonged and deep recession. | |
| 462392854 | expansion or boom | The period in the business cycle from a trough up to a peak during which output and employment grow. | |
| 462392855 | contraction, recession, or slump | The period in the business cycle from a peak down to a trough during which output and employment fall. | |
| 462392856 | unemployment rate | The percentage of the labor force that is unemployed. | |
| 462392857 | inflation | An increase in the overall price level. | |
| 462392858 | hyperinflation | A period of very rapid increases in the overall price level. | |
| 462392859 | Deflation | A decrease in the overall price level. | |
| 462392860 | circular flow | A diagram showing the income received and payments made by each sector of the economy. | |
| 462392861 | transfer payments | Cash payments made by the government to people who do not supply goods, services, or labor in exchange for these payments. They include Social Security benefits, veterans' benefits, and welfare payments. | |
| 462392862 | Components of the Macroeconomy | Households. Firms. The government. The rest of the world. | |
| 462392863 | Three Market Arenas | The goods-and-services market. The labor market. The money (financial) market. | |
| 462392864 | Goods-and-Services Market | Firms supply to the goods-and-services market. Households, the government, and firms demand from this market. | |
| 462392865 | Labor Market | In this market, households supply labor and firms and the government demand labor. | |
| 462392866 | Money Market | Households supply funds to this market in the expectation of earning income in the form of dividends on stocks and interest on bonds. Much of the borrowing and lending of households, firms, the government, and the rest of the world are coordinated by financial institutions | |
| 462392867 | Dividends | The portion of a firm's profits that the firm pays out each period to its shareholders | |
| 462392868 | shares of stock | Financial instruments that give to the holder a share in the firm's ownership and therefore the right to share in the firm's profits. | |
| 462392869 | corporate bonds | Promissory notes issued by firms when they borrow money. | |
| 462392870 | Treasury bonds, notes, and bills | Promissory notes issued by the federal government when it borrows money. | |
| 462392871 | fiscal policy | Government policies concerning taxes and spending. | |
| 462392872 | monetary policy | The tools used by the Federal Reserve to control the quantity of money, which in turn affects interest rates. | |
| 462392873 | Great Depression | The period of severe economic contraction and high unemployment that began in 1929 and continued throughout the 1930s. | |
| 462392874 | fine-tuning | The phrase used by Walter Heller to refer to the government's role in regulating inflation and unemployment. | |
| 462392875 | stagflation | A situation of both high inflation and high unemployment | |
| 471472663 | consumer price index (CPI) | A price index computed each month by the Bureau of labor Statistics using a bundle that is meant to represent the "market basket" purchased monthly by typical urban consumer. | |
| 471472664 | cyclical unemployment | Unemployment that is above frictional plus structural unemployment | |
| 471472665 | discouraged-worker effect | The decline in the measured unemployment rate that results when people who want to work but cannot find jobs grow discouraged and stop looking, thus dropping out of the ranks of the unemployed and the labor force. | |
| 471472666 | employed | Any person 16 years old or older (1) who works for pay, either for someone else or in his or her own business for 1 or more hours per week, (2) who works without pay for 15 or more hours per week in a family enterprise, or (3) who has a job but has been temporarily absent with or without pay. | |
| 471472667 | frictional unemployment | the portion of unemployment that is due to the normal turnover in the labor market; used to denote short-run job/skill matching problems | |
| 471472668 | labor force | The number of people employed plus the number of unemployed. | |
| 471472669 | labor force participation rate | The ratio of the labor force to the total population 16 years old or older. | |
| 471472670 | natural rate of unemployment | the unemployment that occurs as a normal part of the functioning of the economy. Sometimes taken as the sum of frictional unemployment rate and structural unemployment. | |
| 471472671 | not in the labor force | a person who is not looking for work because he or she does not want a job or has given up looking | |
| 471472672 | output growth | The growth rate of the output of the entire economy. | |
| 471472673 | per-capita output growth | the growth rate of output per person in the economy | |
| 471472674 | producer price indexes (PPIs) | Measures of prices that producers receive for products at all stages in the production process. | |
| 471472675 | Productivity Growth | The growth rate of output per worker. | |
| 471472676 | real interest rate | The difference between the interest rate on a loan and the inflation rate. | |
| 471472677 | structural unemployment | the portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries | |
| 471472678 | unemployed | A person 16 years old or older who is not working, is available for work, and has made specific efforts to find work during the previous 4 weeks. | |
| 471472679 | unemployment rate | The ratio of the number of people unemployed to the total number of people in the labor force | |
| 471472680 | labor force (equation) | employed + unemployed | |
| 471472681 | population (equation) | labor force + not in labor force | |
| 471472682 | unemployment rate (equation) | unemployed / ( employed +unemployed ) | |
| 471472683 | labor force participation rate (equation) | labor force/population | |
| 471782151 | Treasury bonds, notes and bills | Prommissory notes issued by the federal government when it borrows money. | |
| 471782152 | base year | The year chosen for the weights in a fixed-weight procedure. | |
| 471782153 | change in business inventory | The amount by which firms' inventories change during a period. Inventories are the goods that firms produce now but intend to sell later. | |
| 471782154 | compensation of employees | Includes wages, salaries, and various supplements—employer contributions to social insurance and pension funds, for example—paid to households by firms and by the government. | |
| 471782155 | corporate profits | The income of corporations. | |
| 471782156 | current dollars | The current prices that we pay for goods and services. | |
| 471782157 | depreciation | The amount by which an asset's value falls in a given period. | |
| 471782158 | disposable personal income or after-tax income | Personal income minus personal income taxes. The amount that households have to spend or save. | |
| 471782159 | durable goods | Goods that last a relatively long time, such as cars and household appliances. | |
| 471782160 | expenditure approach | A method of computing GDP that measures the total amount spent on all final goods and services during a given period. | |
| 471782161 | final goods and services | Goods and services produced for final use. | |
| 471782162 | fixed weight procedure | A procedure that uses weights from a given base year. | |
| 471782163 | government consumption and gross investment (G) | Expenditures by federal, state, and local governments for final goods and services. | |
| 471782164 | gross domestic product (GDP) | The total market value of all final goods and services produced within a given period by factors of production located within a country. | |
| 471782165 | Gross investment | The total value of all newly produced capital goods (plant, equipment, housing, and inventory) produced in a given period. | |
| 471782166 | gross national income (GNI) | GNP converted into dollars using an average of currency exchange rates over several years adjusted for rates of inflation. | |
| 471782167 | Gross National Product (GNP) | The total market value of all final goods and services produced within a given period by factors of production owned by a country's citizens, regardless of where the output is produced. | |
| 471782168 | Gross Private Domestic Investment (I) | Total investment in capital—that is, the purchase of new housing, plants, equipment, and inventory by the private (or nongovernment) sector. | |
| 471782169 | Income Approach | A method of computing GDP that measures the income—wages, rents, interest, and profits—received by all factors of production in producing final goods and services. | |
| 471782170 | Indirect taxes minus subsidies | Taxes such as sales taxes, customs duties, and license fees less subsidies that the government pays for which it receives no goods or services in return. | |
| 471782171 | intermediate goods | Goods that are produced by one firm for use in further processing by another firm. | |
| 471782172 | National Income | The total income earned by the factors of production owned by a country's citizens. | |
| 471782173 | National Income and product accounts | Data collected and published by the government describing the various components of national income and output in the economy. | |
| 471782174 | Net Business transfer payments | Net transfer payments by businesses to others. | |
| 471782175 | Net Exports (EX-IM) | The difference between exports (sales to foreigners of U.S.-produced goods and services) and imports (U.S. purchases of goods and services from abroad). The figure can be positive or negative. | |
| 471782176 | Net Interest | The interest paid by business. | |
| 471782177 | Net Investments | Gross investment minus depreciation. | |
| 471782178 | Net National product (NNP) | Gross national product minus depreciation; a nation's total product minus what is required to maintain the value of its capital stock. | |
| 471782179 | Nominal GDP | Gross domestic product measured in current dollars. | |
| 471782180 | Nondurable goods | Goods that are used up fairly quickly, such as food and clothing. | |
| 471782181 | nonresidential investments | Expenditures by firms for machines, tools, plants, and so on. | |
| 471782182 | personal consumption expenditures (C) | Expenditures by consumers on goods and services. | |
| 471782183 | personal income | The total income of households. | |
| 471782184 | personal savings | The amount of disposable income that is left after total personal spending in a given period. | |
| 471782185 | personal savings rate | The percentage of disposable personal income that is saved. If the personal saving rate is low, households are spending a large amount relative to their incomes; if it is high, households are spending cautiously. | |
| 471782186 | Proprietors income | The income of unincorporated businesses. | |
| 471782187 | rental income | The income received by property owners in the form of rent. | |
| 471782188 | residential investments | Expenditures by households and firms on new houses and apartment buildings. | |
| 471782189 | services | The things we buy that do not involve the production of physical things, such as legal and medical services and education. | |
| 471782190 | statistical discrepancy | Data measurement error. | |
| 471782191 | surplus of government enterprises | Income of government enterprises. | |
| 471782192 | underground economy | The part of the economy in which transactions take place and in which income is generated that is unreported and therefore not counted in GDP. | |
| 471782193 | value added | The difference between the value of goods as they leave a stage of production and the cost of the goods as they entered that stage. | |
| 471782194 | weight | The importance attached to an item within a group of items. | |
| 471782195 | Expenditure approach to GDP | C+I+G+(EX-IM) | |
| 471782196 | GDP | Final Sales + Change in business inventories | |
| 471782197 | Net Investment | Capital end of period - Capital beginning of period |
